Pfi is privatisation but not obvious to the public

Public paying for overpriced private assets.

Keir Starmer is courting Blackrock, Its going to be worse than the rubbish PFI contracts.

Absolutely spot on, it was a disgrace that they used it first time and it's madness that they are going to do it again.

PFI was a disaster for London Underground through PPP. The tax payer footed the losses - nearly £1bn.

P.F.I. was disastrous. Jeremy Hunt tried to close the vital Lewisham Hospital in South London when he was the health minister because it was the only one in South East London that was not on P.F.I. Lewisham Hospital was all paid for. The huge debts of P.F.I. compared to govt borrowing were just naked corruption.

A ruse to keep the debt off balance sheet but we pay through the nose for "rent". We are already owned by corporate interests. Time for real democracy.

Think Brighthouse on steroids. Over charged for goods that fall apart before finished paying for them. PFI in a nut shell.

Its a way of rewarding your rich party sponsors with public money.

We will have more Carillions and unfinished projects, what could possibly go wrong 😢

I hope not. PFI got projects underway but at too high a cost. PFI has contributed to the breaking of our education and health systems. Private equity will asset strip the country of whatever assets we have left.

PFI puts money in the hands of rich companies to the detriment of government finances. Moving debt from the government's accounts to a PFI where the government is committed to paying even greater sums to the PFI does not rid the country of the debt and is no more than financial chicanery. Under a previous PFI I recall that a hospital was built where the doorways were not wide enough for trolleys to pass through.

Labour - crippling Scotland as always Next PFI - GB Energy

So many parts of Scotland are still paying for this now.

As soon as Labour announced their Great British Energy plan, it did appear that PF! was back again. Yet another way to fulfill their 'Public cost, private profit' dream.

I have the pleasure of working in a PFI hospital and it's a massive rip off for the tax payer and prevents us providing a better service for our patients. It was always about off balance sheet accounting first and foremost, Gordon Brown being too clever for our own good. So yes we should fully expect more of the same. The fact that Reeves used to work at the BOE is warning enough. Just ask David Blanchflower.

They will never learn which is not help by their very short memories

Anything to keep the debt off the books.

Government by Blackrock... what could possibly go wrong.

Labour is economically illiterate. I was a publican when all that PFI insanity was going on. And to me, as a publican, it was blindingly obvious that it would blow up down the line.

It is not such folly if you are actually one of the shareholders of the private equity company who is going to benefit. Never trust a politician.

Good video, we need to write to our new MPs and ask for assurances that PFIs will not be returning.

😡😡😡 KEEP PFI/PPP OUT OF SCOTLAND!

Anyone who knows how to balance their own household income would never have touched Pfi never mind what Reeves has in mind. Everything shows that not a single one of them should be in control of public spending and finances as they can’t live within their means in their well paid jobs without dipping into taxpayers pockets that the general public would be embarrassed to claim, I say shame on them all.

I find your segments very interesting and informative I very much hope you will continue to provide these analyses Wish you good luck in building up your audience over time

I would like to know why labour are thinking of putting black rock in charge of our vital infrastructure? They’re a private company that puts its investors first. They have a record of not delivering value for money and leaving services worse off. Black rock will privatise Britain with our tax money as a sweetener. I have awful memories of PFI and the overspend that cost the public dearly, paying extortionate amounts to private contractors that built, designed and financed public services like prisons, schools and hospitals before handing them back to the state, often in very bad condition. Big finance plan to own our infrastructure outright to generate profit and steady revenue, that really should belong to the public. We should not tolerate the government handing out public services for privatised infrastructure. Black rock has already bought £1.4 billion of rental homes and non performing mortgages from Vistry in the uk alone. This has delivered higher rents and displacement of lower income tenants. There’s already been big pushback against institutional landlords from Copenhagen to Berlin, Dublin and Madrid. The state should be building new public housing not black rock. This investment by black rock also makes it much harder to bring public goods back into public ownership and allows private finance to tighten its grip on the social contract with citizens to become the ultimate arbiter of climate, energy and welfare politics which will have profound distributional, structural and political consequences. Black rock has already lobbied heavily against fossil fuel regulation it is highly likely that our future energy costs could spiral under black rock and could embolden anti green movements that tie into authoritarian and right wing politics. Labour need to answer these questions and I come at this as someone who’s father was a die hard labour supporter in the 70s and 80s. We need to plan creatively for the future and not let private investment suck public money from our trough like pigs. If we have to shoulder the costs I’d rather pay more in tax to get things done than have black rock sponge out money for little return. Also the tories are knee deep in black rock, Sajid Javid works for them, and so did Jeremy Hunt. This isn’t a tribal issue it’s a national one, we should either be prepared to pay more tax to dig us out of the mess the tories have left, or have black rock run our lives.

Why can’t we just print the money?

how do we borrow more without telling anyone we are borrowing more....

History is there to teach us and we should learn from it

It's a pay day loan.

Just to add for balance that Labour have not initiated this. They are ‘thinking’ about the options. We should tell them to vigorously reject the idea.

Great video Richard, keep them coming your work is great;-)

PPPs .PFIs can also lead to higher regressive user pays charges which disproportionately impact the poor.

Hi Richard J Murphy, thank you for doing this video describing the real costs of PFI and the long term debt burden it has caused, actually there is quite a lot more to it than just the monery, the increased layers of management and administration have also added much to the total costs but there again the worst aspects are the ridiculous difficulties when getting the repairs and maintenance work done at all let alone properly. I have been fascinated by the gradual degradation of public services over the last forty years it has never been easy to establish any singularity of cause, it is clearly the product of a number of factors with ideological principles but one of many. It is now very clear that the powers that should not be have a very poor grasp of reality, obsessed as they all are by their political convictions, much the same applies to the culture and style of 'modern' management where none of those taking senior positions in management are required to demonstrate any competence or qualification, just as with our politicians simple desire to take the job is considered adequate. As a long term operator of a one man business in the construction industry I have long understood that effective and sensible management of my business was both essential and very difficult!, it has taken me many decades to learn how to consult and consider the help of others around me, like every body else just because I wanted to make all the decisions that did not make me able or effective!, consultation and collaboration was and is the only way forward, it is never a case of right or wrong only of finding effective workable solutions from any available source. Cheers, Richard.

Another disaster in the offing, do they ever learn😢

Well now we can see how they'll avoid raising taxes.

100% definitely happening. Probably at worse terms for the public but better terms for Rachel Reeves personally.

Please no repeat of PFI. It’s a rip off

Public Finance Insanity for the financially insane. You know it makes nonsense!!!

Labour needs to appoint a dedicated Transport Commissioner for West Yorkshire to match the Greater London Authority. Currently, the Transport for North CO serves a number political madters and is therefore absolutely ineffective in running transport in each region.

Depressing!

Wow! I don’t often totally agree with Richard, but on this subject we are as one. I am starting to like him. The reckless expansion of PFI usage resulted in financial millstones for hospitals and schools and was one of the main reasons I fell totally out of love with Labour in the mid-noughties , after celebrating their 1997 win. (The others were 1. Gordon Brown killing off a pension provision system that was the envy of the world. 2. Selling the country’s gold reserves at rock-bottom prices. 3. Continuing to increase public sector wages, with no corresponding increase in productivity, while equivalent wages in the private sector were already static. 4. The settlement with doctors in 2003 that involved far more money for less actual work.) I definitely don’t trust Labour not to mess things up again, but last time I didn’t see it coming.

What would you say about a system where the government built infrastructure - schools and hospitals - fixed price procurement only - and when built sold them to UK pension funds so they could reap the rental income? Say at a 5% yield? That way both the debt and the asset are removed from the government balance sheet immediately. The government is then free to move on to the next project without rasing the overall debt ceiling. These assets should be built with UK national materials only i.e. labour and equipment. Thus promoting UK employment and manufacturers.

But did PFI ever go away - I assumed it was still ongoing since Blair introduced it

Excellent .

This needs talking about much more than it is

PFI , oh itll be coming back and theres still a load of these schemes in place.

If you need anything important done,never trust a politician to do it.

At the time PFI/PPP was off the public balance sheet. It's not now.

Excellent contribution Richard. It boils down to a short term accounting trick to keep the debts off the government’s balance sheet but which ends up costing much more in the medium term and lines the pockets of the contractors. (The same perverse logic applies to student loans). The answer is ….. I’d be interested in your views on ‘modern monetary theory’ as an alternative approach!

Nothing screams, we need a change of course more than the reheating of old ideas.

Why not call it out for what it is? Class war.

Worries me too. It’s a license for the private sector to write cheques for as much as it wants.

Yes

PFI also comes in with tied contractors too, if they are crap/exensive you can't get rid off them

I spent 2 years going around fixing major structural defects in hospitals and schools caused by PFI. Fire walls only built to just above the level of ceiling tiles. Lift shafts that would accelerate smoke travel through haspitals. Many of our hospitals and schools have had very expensive repairs just to bring them up to a minimal standard of structural, fire and electrical standards. The original contracts were subcontracted so many times that it is almost impossible to bring the people responsible to justice. Jimmy's hospital in Leeds has cost more than the price of 2 hospitals just to correct structural errors made in its original build. The M1. Contractors paid a bonus for early completion then it closed for another year because they hadn't put in drains. PFI is a con.

Another vital video. A sovereign government with its own currency, Central Bank and Treasury can just create money then spend it into society. Targeted and with care. That is one of its main duties.

Governments used to issue bonds to raise money. In spite of lower returns than equity, certain investors were happy to take the certainty of their return, and avoid volativity. I really hope that we aren't making the same mistake again.

Sincerely hope RR isn't taking this route. Has she not seen what private equity has done to the already messed up American health care systems

I read the article in the Grauniad yesterday. I was surprised they ran it, considering how far up Starmer's behind they are. Is it just a diversionary scare story? Trouble is, I think it's right up Rachel Street Porter's alley. She can pretend she's getting things done and her city mates make a heck of a lot of money.

Do you not think that Rachel Reeves plans PFIs for Social Care, British Energy, massive housing contracts and National Rail? I think that Keir Starmer's interviews have suggested this.

The student debt timebomb is going to start going off too, all that debt transfered back to the taxpayer. It's not written off, the liabilies are assumed by the state.

Thanks for this piece of history. Are you worried the King will abdicate like Edward VIII?

The public sector is in the headlights if PFI gets introduced. In my opinion Government should Govern not outsource or contract work out. Starmer needs to Govern and regulate the economy so those at the lower levels of the economic scale get a fair share of the wealth and equality.

Well the tories are already doing pfi big time.

The thing with PFI is, the maintenance doesn’t get done and the Private contractors don't spend a penny. A few health care buildings in Lothian and Borders are coming to the end of their contracts and they need big money spent to bring them up to a standard. Money the contractors are withholding. . Where will the money come from for essential maintenance?

Allegedly Reave has got a brain and knows about pfi,,so why will she go ahead with it.?

PFI is a complete nonsense! Back in the mid nineties I worked for a government department that issued high value contracts. Over about 6 months we generated a contract for 5 items of equipment costing £30 million each. Our leaders were told the whole contract would be tested for PFI compliance and that it would take in the order of 9 months to achieve. After 12 months we received word that our proposed contract was not suitable for PFI and we were to proceed with the purchase of the 3 items. The cost of the exercise was taken from our original budget hence only 3 were now affordable! Stupidity in its finest form!

Oh this sounds so bad , hope it’s not history repeating itself.

I imagine this sort of model would be okay for niche or higher risk applications, but it makes no sense for commodity and low risk sectors.

Misses the root cause of the problems with PFI….. poor procurement by the NHS, Schools and other agencies…… the disaster is primarily of their making…… they designed the contracts…… they identified the scope…… they signed off on these deals….. they contracted with dodgy partners like Carrollton….. they chose the tendering companies…… they failed the taxpayer

Its a dead cert.

Disaster then as now..

Yes.

This is why I will not vote tactically; where is the real change? My own trust is saddled with huge PFI interest payments. We are also having to 'save' £50 million just this year. That is having real consequences for front line services - they have even got rid of an executive post (that's how you know it's reeeeeally bad).

I worked for an Architectural Design company that won many PFI contracts for Hospitals and Schools. It was a great short-term success for the company and many others. Lots of money was made by a relatively small amount of people. It was a great illusionist quick-fix trick used by Blairs Labour party. Spend today, and let future generations worry about how to pay for it in the future. A £200 million project would, in reality, over time cost more than £600 million in repayments. It did not avoid incurring government debt. It simply kicked the debt down the road for others to deal with. It left the country with a horrendous long term debt that is still being paid off today. But the illusionist trick worked. I am sure Labour will be more than happy to perform it again. But, I have to be honest. I don't think any of the other mainstream parties would be averse to doing the same thing. Especially the Conservative party. It made many private companies a lot of money. It still is!

Labour should have been setting up the narrative that borrowing for public infrastructure renewal is an investment which benefits the country. In turn, public sector employees should be paid a respectable salary, which could help staff retention, which leads to better stability and is cost-effective to the public purse. Instead, it has run scared of that narrative, returning to the failed old PFI policy which only benefits the moneyed corporations who will be laughing at us as they get rich at our expense.

Rumours? Perhaps wait for the facts? Personally I’m no fan of PFI, although it does have some advantages, but I’d be surprised if we went down that route

Perhaps I was involved in one that was atypical. I am proud to have been involved with the Broadland Flood Alleviation Project. The works carried out could not have been justified without packaging them as they were. If my understanding is correct should the cost to the tax payer have ever got out of hand then the private sector joint venture company would have been embarrassingly penalised. I agree that in theory government should be able to secure borrowing cheaper than the private sector. I also believe that without shareholders to appease the public sector should be able to undercut the private sector when tendering for such work.

I'm expecting something similar to the VIP lane PPE scenarios where the government overpays companies (board members being family or donors purely coincidental of course) to fill gaps in services that could take the same money and stretch it further. Much easier to spin as a way to "save the NHS" if privatisation is done through the back door and the media have been happily throwing the service under the bus for years in preparation.

Don’t we pay private contractors a return on PFI investment projects.. with secure government bond interests.. & isn’t a bad investment strategy..but it’s those chairing or in control..corrupting & skimming off this workable ideal.. 🤔🤔🙄

I also wonder which private energy companies will be asked to get on board with the new GB Energy initiative Labour are proposing. The energy company that really isn't an energy company. Starmer has admitted this on Scottish Radio. The government will simply occupy its place as a finance management vehicle, underwriting what would otherwise be seen as a risky undertaking by the companies involved. I place my bet on Ecotricity being in line for participation, seeing as their CEO, Dale Vince, has already donated £1.4 million since 2014. Just saying.

I worked in a couple of PFI financed hospitals -the build quality was absolutely dire and I believe a lot of schools and hospitals built under the scheme had RAAC concrete floors/ceilings ;even though the shortcomings of RAAC had been known since the 1930’s. Interesting fact -estimated useable life of a PFI built hospital/school etc…Thirty-six years -average length of a PFI contract well there’s a thing! ….Thirty six years!

Well, that's labour for you.

I'll be glad when this election is over. All this project fear of change is getting tedious beyond belief.

Is Sir Bliar Starmer’s independent party anything to do with the Labour movement, as correctly represented by Jeremy Corbyn ?

But private investment makes everything more efficient, somehow.

I believe this is the only way they can get anywhere near the net zeropolicies. The grid engineers estimate £3 trillion for the renewed green grid, that will hopefully take us through to 2050. The repayments will be colossal. Similarly to give grants on property upgrading will cost £5.5 trillion according to trials done by govmt and Cambridge university. Then EVs charging along with increased supplies will be trillions and increased supplies for replacement of fossil heating and hot water. 100 Gigawatts Capacity will need to become 400 Gigawatts. Where is all this coming from ? If PFI then we will be in hock to trillions and tens of thousands per head. Of population We will” literally be owned by private corporations or destroyed by debt.

Can you make a video about why no government ever implements your economics please?

Sell everything to BlackRock so they can rent it back to us , you will own nothing and be happy

Blair borrowed 13 bn ....we are still paying. Total repay 88 bn....criminal.!

Is it planning PFI? Err, yes they clearly said so in the manifesto, with GB Energy, National Wealth Fund, British Infrastructure Council, etc.. Is it practical for Govt to do it themselves? Err no, servicing the debt pile resulting from the bursting of the PFI/property bubble in 2008, is already soaking up a huge proportion of tax revenues, constraining spending on the NHS, defence, etc.. More lending would be adding fuel to the fire & hastening the day when international funding of gilts dries up & interest rates have to soar to attract domestic funding. Which would suck capital out of private industry & commerce, with consequent deterioration in growth, employment & the tax base. The sort of downward spiral that happened to Argentina. And it's the sort of thing the bond markets & BoE would very strongly deter, as we saw with Liz Truss. Allowing the property/PFI bubble & 2008 Crash to occur has passed all power to such, and it's no use howling at the wind about how 'unfair' having to revert to PFI is.

banana republic

Wtf is going on…. We are heading for a shit show.

Yet people still wonder why I am voting Green rather than joining in with tactical voting I know they won't win my constituency, but if everyone waits for a change, nobody will change anything. I am helping grow the Green vote so we have an alternative to PFI and subcontracting!

I'm so happy I made productive decisions about my finances that changed my life forever,hoping to retire next year.. Investment should always be on any creative man's heart for success in life .

Probably, because Blair is once again, running the Labour Party…

Can you let us know your professional experience of this subject, which w😢ould make everybody ,including the govt take notice of your views.

If they can't borrow and they can't raise taxes and they need to increase growth, PFI seems an option although an expensive option. Sometimes you just have to bite the bullet to get things started

Of course they are. There's no money and they are desperate to be seen to do something.